If you are a restaurant that charges a mandatory 18% service charge on large parties…or if you charge a mandatory $15 corkage fee for opening a customer’s bottle of wine…or a $3 per slice fee for cutting a customer’s birthday cake…you may want to reconsider this practice. Why? Because starting on January 1, 2014, IRS… Read More
Posts Tagged With: tips
IRS Announces Guidance on Withholding of Tips
The IRS today released Internal Revenue Bulletin 2012-26 providing guidance on how taxes are imposed on tips under the Federal Insurance Contributions Act (FICA). The bulletin is in question-and-answer format and includes an explanation of both the employer’s and employee’s obligations. The bulletin also addresses the following issues: — The difference between a tip and… Read More
CA Supreme Court Rules that Employees Cannot Sue for “Tip Pooling” Violations
On August 9, 2010, the California Supreme Court gave restaurant and other hospitality employers a victory in Lu v. Hawaiian Gardens, 50 Cal. 4th 592 (2010), by holding that California Labor Code Section 351 does not contain a private right to sue. Therefore, a tipped employee in California cannot sue his employer in court for… Read More
